Webster to pay $95,464 to Department of Education for improperly disbursing financial aid in London

Webster University will pay $95,464 in liabilities to the Department of Education (DoE) as a result of improperly awarding and distributing more than $2 million of financial aid through its London study abroad program.

A DoE program review found Webster improperly awarded and disbursed $2,345,821 in direct loans and $87,869 of federal pell grants to students through their study abroad program with Regent’s University London, formerly known as Regent’s College.

In July 2014, Webster was informed it may be liable for all Title IV, HEA Programs funds disbursed to Webster students enrolled in programs at Regent’s. According to a DoE program review acquired by The Journal, Regent’s College was an ineligible program at the time. This resulted in the halting of financial aid to current students of Regent’s University.

According to the report, Regent’s did not acquire permission to participate in Title IV, HEA programs through the DoE and had programs that violated department rules, deeming it an ineligible program. As a result of this, Webster permitted Regent’s to improperly receive financial aid for several years.

“Regent’s had not been determined to be an eligible institution, has not signed a Program Participation Agreement with the Department and has not obligated itself to act as a fiduciary with respect to its receipt or disposition of federal funds,” the report stated.

Webster was ordered to cease any awarding of financial aid through Regent’s on July 18, 2014, leaving students studying in London stripped of their financial aid.

On June 8, The Journal asked the university for comment on whether the money had been repaid, if the situation had changed for the students who lost financial aid in London and if the university was aware there was an issue with Regent’s eligibility to disburse funds. The university did not comment by publication time.

Webster reached out to these students for one-on-one meetings to discuss other options, including transferring to other Webster international campuses or taking out private loans. Webster student Kate Welenc told the Post Dispatch, for her, it was too late to transfer to a new campus as her visa expires in October of next year.

“This was a difficult situation for us,” Webster University Director of Public Relations Patrick Giblin said in a Post Dispatch article. “We tried to do our best for these students, and we tried to be as transparent as we could.”

Policy and Strategy Adviser at Regent’s University Sam Cannicott said the Department of Education ensured Regent’s it would be entitled to distribute federal aid to eligible students studying in its United Kingdom programs. He said Regent’s only was ordered to stop distributing funds to students enrolled through Webster’s programs.

“Last year, we were informed by the Department of Education in America that students at Regent’s on Webster University programs would no longer be able to receive Federal Aid,” a Regent’s University press release stated.

In Webster’s initial response to the DoE’s claims, the university acknowledged its agreement with Regent’s College in 2012 may not have been crafted with the necessary precision. It went on to point out the agreement failed to capture the relationship between the institutions.

The university argued against the ruling by claiming it had institutional ownership and authority of their academic programs at Regent’s. The DoE’s final report sustained Webster had violated DoE regulations and would be made to reimburse the department, stating it did not have enough control of its programs in London to claim institutional ownership.

Webster did successfully defend its agreements with several Chinese institutions also being challenged by the DoE by proving no students at those institutions were receiving financial aid.

Webster ended its 20-year relationship with Regent’s University in December 2014 and announced a 24-month search for a new English campus. Giblin told The Journal a new campus could be announced in the near future.

Check www.websterjournal.com for more information as this story develops.